Fresh Del Monte Produce Inc. (FDP) | Investment Case

1. Company Snapshot

1.a. Company Description

Fresh Del Monte Produce Inc., through its subsidiaries, produces, markets, and distributes fresh and fresh-cut fruits and vegetables in North America, Europe, the Middle East, Africa, Asia, and internationally.It operates through three segments: Fresh and Value-Added Products, Banana, and Other Products and Services.It offers pineapples, fresh-cut fruit, fresh-cut vegetables, melons, and vegetables; non-tropical fruits, such as grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries, and kiwis; other fruit and vegetables, and avocados; and prepared fruit and vegetables, juices, other beverages, and meals and snacks.

The company also engages in the sale of poultry and meat products; and third-party freight services business.In addition, it manufactures and sells plastic and box products, such as bins, trays, bags, and boxes.The company offers its products under the Del Monte brand, as well as under other brands, such as UTC, Rosy, Fruit Express, Just Juice, Fruitini, Mann's Logo, Arcadian Harvest, Nourish Bowls, Broccolini, Caulilini, Better Burger Leaf, RomaLeaf, and other regional brands.

It markets and distributes its products to retail stores, club stores, convenience stores, wholesalers, distributors, and foodservice operators.Fresh Del Monte Produce Inc.was founded in 1886 and is based in George Town, Cayman Islands.

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1.b. Last Insights on FDP

Fresh Del Monte Produce Inc.'s recent performance was negatively driven by revenue declines, despite improvement in profitability metrics such as adjusted net income and operating cash flow. The company's Q4 and full-year 2024 earnings release highlighted the challenges in the fresh produce market. Additionally, the company's high operating costs and declining sales in certain segments, such as bananas, may have contributed to the negative sentiment. On a positive note, the company's $150 million share repurchase program and increased quarterly dividend demonstrate its commitment to returning value to shareholders.

1.c. Company Highlights

Last Price	37.14
Change Percentage	0.54%
Open	36.92
Previous Close	36.94
Market Cap ( Millions)	1781
Volume	140132
Year High	40.75
Year Low	26.5
M A 50	35.14
M A 200	33.85

FCF Yield	9.90%
Dividend Yield	3.23%
ROE	3.97%
Debt / Equity	10.67%
Net Debt / EBIDTA	59.03%
Price To Book	0.88
Price Earnings Ratio	22.2
Price To FCF	10.11
Price To sales	0.41
EV / EBITDA	9.52

2. Fresh Del Monte's Q3 2025 Earnings: Steady Progress Amidst Divestiture and Operational Challenges

Fresh Del Monte Produce reported net sales of $1.022 billion, with adjusted net sales of $960 million, and an adjusted gross margin of 9.2%. The company's adjusted net income was $33 million, translating to an earnings per share (EPS) that significantly beat analyst estimates, with actual EPS coming in at $0.69 compared to the estimated $0.28. The company's gross profit was $81 million, and adjusted gross profit was $88 million. The operating loss was $22 million, while adjusted operating income was $40 million. The company's financial performance was driven by strong execution across its portfolio, particularly in its fresh and value-added product segment, which saw an adjusted gross margin of 13.9%.

Publication Date: Nov -03

                                    📋 Highlights
                                    Divestiture of Non-Core Assets:
                                                Sold Mann Packing for $19M + inventory, enhancing capital efficiency and margin profile.
Adjusted Net Income:
                                                Reported $33M adjusted net income despite $29M net loss, reflecting operational adjustments.
Fresh & Value-Added Segment Performance:
                                                13.9% adjusted gross margin, contributing $611M net sales and driving margin expansion.
Pineapple Market Dynamics:
                                                Selective demand with static volumes; company remains a leader in innovation amid cost pressures.
Capital Returns:
                                                Declared $0.30/share dividend and repurchased $7M worth of shares, reflecting confidence in capital allocation.

                                

Segment-wise Performance

The fresh and value-added products segment reported net sales of $611 million, while the banana segment reported net sales of $358 million with an adjusted gross margin of 1.2%. The company's pineapple business is experiencing normal cost increases, mainly due to labor and services, but no significant increases are expected. The company is a leader in innovation and development, and its pineapple volumes are static, with demand outstripping supply, making it a selective market.

Divestiture and Strategic Initiatives

The company entered into an agreement to divest the operations of Mann Packing for $19 million plus the value of inventory, which is expected to close during the fourth quarter of 2025. This divestiture is expected to strengthen the company's margin profile and enhance capital efficiency. The company declared a quarterly cash dividend of $0.30 per share and repurchased over 200,000 shares of its common stock for $7 million.

Outlook and Valuation

The company expects net sales growth of approximately 2% year-over-year and gross margins of 11-13% in the fresh and value-added products segment. With a current P/E Ratio of 21.13 and a Dividend Yield of 3.25%, the market appears to be pricing in moderate growth expectations. Analysts estimate next year's revenue growth at 2.7%, which is slightly higher than the company's guidance. The EV/EBITDA ratio of 12.93 suggests that the company's valuation is reasonable compared to its earnings before interest, taxes, depreciation, and amortization.

Operational Challenges and Industry Dynamics

The company faces operational challenges, including increasing costs due to diseases such as Sigatoka in its banana segment, and low pricing in the avocado market. However, the company expects some price firming in the avocado market in the next 2-3 months. The formation of VANA, a new organization with the four largest banana producers, aims to improve agricultural practices and logistics. The company's margins have been resilient due to its buying strategy, and it is confident about its pineapple business, with limited land available for expansion in Costa Rica.

3. NewsRoom

Fresh Del Monte Produce, Inc. $FDP Shares Sold by Geode Capital Management LLC

Nov -29

Source: defenseworld.net

American Century Companies Inc. Increases Stake in Fresh Del Monte Produce, Inc. $FDP

Nov -29

Source: defenseworld.net

Fresh Del Monte Produce Inc. and THACO AGRI Sign Strategic Sourcing Partnership for Bananas

Nov -26

Source: businesswire.com

Critical Comparison: N2OFF (NASDAQ:NITO) vs. Fresh Del Monte Produce (NYSE:FDP)

Nov -03

Source: defenseworld.net

Fresh Del Monte: Going Bananas Over This Stock, A Strong Dividend Opportunity

Oct -30

Source: seekingalpha.com

Fresh Del Monte Produce Inc. (FDP) Q3 2025 Earnings Call Transcript

Oct -29

Source: seekingalpha.com

Fresh Del Monte Produce Inc. Reports Third Quarter Earnings for Fiscal 2025

Oct -29

Source: businesswire.com

Beyond The Food Fight: Top Agriculture Stocks As Soybeans Soar

Oct -29

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.78%)

6. Segments

Banana

Expected Growth: 4.83%

Fresh Del Monte Produce Inc.'s banana segment growth of 4.83% is driven by increasing demand for healthy and convenient food options, expansion in emerging markets, and strategic acquisitions. Additionally, the company's focus on sustainability and social responsibility initiatives has improved its brand reputation, attracting environmentally conscious consumers.

Fresh and Value-added Products - Pineapples

Expected Growth: 4.65%

Strong demand for healthy and convenient food options, increasing popularity of pineapples in smoothies and as a topping, expansion in emerging markets, and effective supply chain management by Fresh Del Monte Produce Inc. contribute to the 4.65% growth in fresh and value-added pineapple products.

Fresh and Value-added Products - Fresh-cut Fruit

Expected Growth: 4.65%

The 4.65% growth in Fresh and Value-added Products, specifically Fresh-cut Fruit from Fresh Del Monte Produce Inc., is driven by increasing consumer demand for healthy and convenient food options, rising popularity of meal kits and online grocery shopping, and the company's strategic expansion into new markets and product lines.

Fresh and Value-added Products - Fresh-cut Vegetables

Expected Growth: 4.65%

The 4.65% growth in Fresh and Value-added Products, specifically Fresh-cut Vegetables from Fresh Del Monte Produce Inc., is driven by increasing consumer demand for healthy and convenient food options, rising popularity of meal kits and online grocery shopping, and the company's strategic expansion into new markets and product lines.

Fresh and Value-added Products - Avocados

Expected Growth: 5.24%

The 5.24% growth in Fresh and Value-added Products - Avocados from Fresh Del Monte Produce Inc. is driven by increasing demand for healthy and sustainable food options, rising popularity of avocados in foodservice and retail, and strategic expansion into new markets and distribution channels.

Fresh and Value-added Products - Prepared Foods

Expected Growth: 4.65%

Fresh and Value-added Products - Prepared Foods segment growth of 4.65% driven by increasing demand for healthy and convenient food options, expansion into new markets, and strategic investments in product innovation and distribution channels, resulting in higher sales volumes and revenue growth.

Other Products and Services

Expected Growth: 5.0%

Fresh Del Monte's 5.0% growth in Other Products and Services is driven by increasing demand for healthy and convenient food options, expansion into new markets, and strategic partnerships. The company's diversified product portfolio, including avocado, tomato, and berry products, has also contributed to growth. Additionally, investments in e-commerce and digital platforms have enhanced customer engagement and driven sales.

Fresh and Value-added Products - Non-tropical Fruit

Expected Growth: 4.65%

Strong demand for healthy and convenient food options, increasing popularity of online grocery shopping, and strategic expansion into emerging markets drive growth in Fresh Del Monte's non-tropical fruit segment, with a 4.65% growth rate. Additionally, the company's focus on sustainability, quality, and innovation in its value-added products contributes to its market share gain.

Fresh and Value-added Products - Vegetables

Expected Growth: 4.65%

Fresh Del Monte Produce Inc.'s 4.65% growth in Fresh and Value-added Products - Vegetables is driven by increasing consumer demand for healthy and convenient food options, expansion into emerging markets, and strategic acquisitions. Additionally, the company's focus on sustainability, quality, and innovation in its products has contributed to its growth.

Fresh and Value-added Products - Melons

Expected Growth: 4.65%

Strong demand for healthy and convenient food options, increasing popularity of melons in emerging markets, and Fresh Del Monte's strategic expansion into new distribution channels and geographic regions, such as e-commerce and Asia, drive the 4.65% growth in fresh and value-added melon products.

Fresh and Value-added Products - Other Fruit and Vegetables

Expected Growth: 4.73%

Strong demand for healthy and convenient food options, increasing popularity of meal kits and online grocery shopping, and expansion into emerging markets drive growth in Fresh and Value-added Products - Other Fruit and Vegetables segment, with a 4.73% growth rate.

Fresh and Value-added Products - Tomatoes

Expected Growth: 5.15%

Fresh Del Monte Produce Inc.'s 5.15% growth in Fresh and Value-added Products - Tomatoes is driven by increasing demand for healthy and convenient food options, expanding distribution channels, and strategic acquisitions. Additionally, the company's focus on sustainability, quality, and innovation has enhanced its brand reputation, attracting premium prices and driving revenue growth.

7. Detailed Products

Fresh Fruits

Fresh Del Monte Produce Inc. offers a wide range of fresh fruits including bananas, apples, grapes, and more, sourced from its own farms and partner farms around the world.

Fresh Vegetables

The company provides a variety of fresh vegetables such as tomatoes, cucumbers, bell peppers, and more, grown using sustainable farming practices.

Cut Fruit and Vegetables

Fresh Del Monte Produce Inc. offers pre-cut and pre-washed fruits and vegetables, perfect for convenience and healthy snacking.

Avocados

The company grows and distributes high-quality avocados, a popular ingredient in modern cuisine.

Pineapples

Fresh Del Monte Produce Inc. is a leading producer and distributor of fresh pineapples, grown in its own farms and partner farms.

Bananas

The company is one of the largest producers and distributors of bananas, sourced from its own farms and partner farms around the world.

Melons

Fresh Del Monte Produce Inc. offers a variety of melons, including watermelon, cantaloupe, and honeydew, grown using sustainable farming practices.

Grapes

The company grows and distributes table grapes, perfect for snacking, cooking, and baking.

8. Fresh Del Monte Produce Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Fresh Del Monte Produce Inc. faces moderate threat from substitutes, as consumers have alternative options for fresh produce, but the company's strong brand and quality products help to mitigate this threat.

Bargaining Power Of Customers

Fresh Del Monte Produce Inc. has a diverse customer base, which reduces the bargaining power of individual customers, and the company's strong relationships with retailers and distributors also help to minimize this threat.

Bargaining Power Of Suppliers

Fresh Del Monte Produce Inc. faces moderate bargaining power from suppliers, as the company relies on a network of farmers and growers, but the company's scale and long-term contracts help to mitigate this threat.

Threat Of New Entrants

Fresh Del Monte Produce Inc. operates in a highly competitive industry, but the company's strong brand, established distribution networks, and high barriers to entry make it difficult for new entrants to gain significant market share.

Intensity Of Rivalry

Fresh Del Monte Produce Inc. operates in a highly competitive industry with many established players, leading to intense rivalry and pricing pressure, but the company's strong brand and operational efficiency help to mitigate this threat.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	23.98%
Debt Cost	3.95%
Equity Weight	76.02%
Equity Cost	6.64%
WACC	6.00%
Leverage	31.55%

11. Quality Control: Fresh Del Monte Produce Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Fresh Del Monte Produce

A-Score: 6.7/10

Value: 7.8

Growth: 4.6

Quality: 4.9

Yield: 6.0

Momentum: 8.5

Volatility: 8.3

1-Year Total Return ->

CHS

A-Score: 6.2/10

Value: 6.2

Growth: 3.7

Quality: 3.6

Yield: 10.0

Momentum: 3.5

Volatility: 10.0

1-Year Total Return ->

Limoneira

A-Score: 4.9/10

Value: 8.4

Growth: 6.0

Quality: 4.9

Yield: 4.0

Momentum: 0.0

Volatility: 6.3

1-Year Total Return ->

Vital Farms

A-Score: 4.9/10

Value: 4.5

Growth: 9.6

Quality: 6.6

Yield: 0.0

Momentum: 5.0

Volatility: 3.7

1-Year Total Return ->

Alico

A-Score: 4.5/10

Value: 5.0

Growth: 0.9

Quality: 2.0

Yield: 3.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

Village Farms

A-Score: 3.8/10

Value: 3.5

Growth: 3.1

Quality: 5.1

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-5.10%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.00%

Fresh Del Monte Produce Inc. - KYG367381053

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FDP

1.c. Company Highlights

Cheaper

Average Quality

Average Yield

Earnings Miss

Revenues Miss

Average Growth

Earnings Beats

Lower Quality

Weak Momentum

Revenues Beats

Stable Momentum

Medium Volatility

Strong Momentum

Fairly Valued

Less Volatile

Higher Yield

2. Fresh Del Monte's Q3 2025 Earnings: Steady Progress Amidst Divestiture and Operational Challenges

Segment-wise Performance

Divestiture and Strategic Initiatives

Outlook and Valuation

Operational Challenges and Industry Dynamics

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.78%)

6. Segments

Banana

Expected Growth: 4.83%

Fresh and Value-added Products - Pineapples

Expected Growth: 4.65%

Fresh and Value-added Products - Fresh-cut Fruit

Expected Growth: 4.65%

Fresh and Value-added Products - Fresh-cut Vegetables

Expected Growth: 4.65%

Fresh and Value-added Products - Avocados

Expected Growth: 5.24%

Fresh and Value-added Products - Prepared Foods

Expected Growth: 4.65%

Other Products and Services

Expected Growth: 5.0%

Fresh and Value-added Products - Non-tropical Fruit

Expected Growth: 4.65%

Fresh and Value-added Products - Vegetables

Expected Growth: 4.65%

Fresh and Value-added Products - Melons

Expected Growth: 4.65%

Fresh and Value-added Products - Other Fruit and Vegetables

Expected Growth: 4.73%

Fresh and Value-added Products - Tomatoes

Expected Growth: 5.15%

7. Detailed Products

Fresh Fruits

Fresh Vegetables

Cut Fruit and Vegetables

Avocados

Pineapples

Bananas

Melons

Grapes

8. Fresh Del Monte Produce Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

12.e Scoring ^Insights

12.f DCF ^BETA